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Dr Z - Anti-Kickback Statutes

Posted by elvis on 2/24/05 at 13:06 (169802)

I did some looking last night. It appears that there are federal anti-kickback statutes regulating the health care industry especially relating to services provided under a federal health program. It's complicated and I don't have time right now to look into this. However, a couple of comments. I don't see the equipment manufacturer's discount to me as a kickback to anyone at least under the normal meaning of the word'kickback.' Of course there are 'safe harbor' rules that allow 'kickbacks' in certain cases. For every rule a lawyer makes there's got to be exceptions! LOL Anyway here's some info on the federal law which I think only applies if the services are billed to a federal health care program.


That's one reason maybe that United Shock Wave doesn't do Medicare patients. The other is that there is a prohibition against having an ownership interest by a doctor in an entity
that provides service and bills under Medicare - reason #2 for United not treating Medicare patients.

Here's another exception (i think) where hospitals are allowed to grant discounts or even waive payments to underinsured and uninsured patients without violation of the anti-kickback statute. They distinguish between discounts/waiver of payment versus bad debts.


The scenario that I was quoted ($800 doctor fee and the equipment company would pursue reimbursement from my insurance carrier) resulting in me paying only $800 for a Dornier ESWT procedure is very similar to the above exception. I can't see that it is a kickback. To the contrary, the equipment company is undertaking all of the risk for getting reimbursement from my insurance company (Blue Cross PPO). As you aptly pointed out in an ealrier post what this system ends up with are some patients in effect getting free equipment use while others pay for equipment use. The equioment comapny get reimbursed for some of their claims and not for others. This makes it difficult to figure out what is a 'fair' price or normal and custumary charge. But that is the fight that all procedures go through between the provider and the insurance company. by United taking on the fight with the insurance companies I bleieve that ultimatelty it will end up that ESWT will be a covered procedure. The little I know about competition and anti-trust law I would expect that the feds would stay out of this dispute because right now it is pro-c0onsumer and the prices are erroding. You are 100% correct though in assuming that if a monopoly is formed then the price will indeed go up. Then the feds will step in and do something. In the meantime I think we're stuck with what's going on. It's good for me the consumer and bad for all providers but not equally. Some providers will suffer much more than others.

I will check with a friend to see if I can find out more.

Re: Dr Z - Anti-Kickback Statutes

Dr. Z on 2/25/05 at 20:53 (169924)

Two comments
1. It is a doctor violation and not a equipment violation. It is sort of like in law if there is ANY hint of conflict of interest then you must remove yourself from the case. In medicine if there is any hint of any type of giving away something to the doctor for referrals then it is an violation of state statutue at least that is New Jersey State Board Law.
2. By companies giving free use of eswt equipment services as a policy will make the insurance companies just drop the procedure from coverage. I know if I was an insurance company that is what I would do and that is exactly what is happening throughout the entire USA.

Re: Dr Z - Anti-Kickback Statutes

elvis on 2/25/05 at 22:02 (169928)

My brain still hurts trying to think of why there is 'a giving away of something' to the doctor in this scenario. I am paying the doctor's fee. The equipment compnay is charging me a fee for the machine rental but istead of taking payment from me they are agreeing to take whatever my insurance company pays them which could be nothing I guess. How is the doctor getting something for free?

Re: Dr Z - Anti-Kickback Statutes

vince on 2/26/05 at 08:58 (169940)

I am sure that Dr. Z is making these acusations against the business policy of United Shockwave because he can't compete against them in his area. They are probably the biggest ESWT service providers in the USA and this worries him. If I were him I'de be careful as to what acusations I made because I would be worried about legal retaliation. Out of curiosity I looked at the list of podiatrist's on his website and on United's and I see a lot of the same names. I wonder who really is using who's equipment. I'll ask Dr Z a ?. Dr Z, do you think that the legal staff at a company, in business for as long and as succesfuly as United is and has been, has not availed themselves of effective legal council and is conducting business in a manner that could possibly have severe legal complications for them. I doubt it.

Re: Dr Z - Anti-Kickback Statutes

Dr. Z on 2/26/05 at 09:29 (169945)

Everything that I have stated is quoted from legal advice and is in wrting.
Again what I am saying isn't against United. It directly pertains to the
doctors ordering ESWT equipment. I want you to understand that my statement pertains to the doctors and not United . United isn't reguated by Medical State Boards but Doctors are. Anyway time will show you. This has nothing to do with United legal eagles it has to do with what advice if any are doctors getting about this policy..

Re: Dr Z - Anti-Kickback Statutes

vince on 2/26/05 at 12:00 (169950)

I am aware of how you operate and I persoanly don't believe that your business model may be totaly immune from a close look at it by some governing agency. How about podiatrist that are investors in surgery centers, book their patients into them for surgery and then get dividends on their investment. Sounds like a similar type of operation to me.

Re: Dr Z - Anti-Kickback Statutes

john on 2/26/05 at 14:02 (169953)


The key idea is that the doctor is getting paid his professional fee in a situation that he would usually not get paid.

Specifically, if the equipment provider did not 'give away' the equipment, the doctor would not get paid for his services since the patient would not choose ESWT without the equipment company's non-bill guarantee. The give away is the free use of the equipment without any obligation to the patient or the doctor. The result is the doctor collect a fee he could not otherwise collect and, as a bonus, the equipment company operates the equipment and performs the procedure.

In addition, the equipment provider expects, with good reason, that the doctor will refer all of his patients with insurance coverage to be treated on the company's machine.

Re: Dr Z - Anti-Kickback Statutes

Dr. Z on 2/26/05 at 14:11 (169955)

You make another very important point.

Re: Dr Z - Anti-Kickback Statutes

Dr. Z on 2/26/05 at 14:16 (169956)


See John's post below he helps to describe what I may have not made clear. Without the free use of the equipment the doctor doesn't get paid by the insurance company. You need the equimpment in order for the doctor to perform and bill his professional sevice. In return the equipment company does this to get referrals for more ESWT equipment services.

Re: Dr Z - Anti-Kickback Statutes

elvis on 2/26/05 at 18:28 (169978)

I got it now. Sorry for being so thick! LOL Now, I am biased here because I am a potential consumer of ESWT. However, I am also biased because I am a lawyer albeit a 'good' lawyer! LOL

It's all pretty confusing to the consumer. I first got information here on this website. Then I made several inquiries of ESWT service providers and equipment manufacturers. The response I got from Dornier gave me 2 links. One was pretty useless as far as I could tell. The other was United Shock Wave that had a tab to click on to locate an ESWT doctor. But no explanation was ever given to me of how Dornier, United Shock Wave, the doctors and any other 3rd parties (insurance companies, etc) were related. I called my local pdiatrist and left a message that I may be needing ESWT. He called back and said he does do ESWT either with the OssaTron or the Dornier EPOS Ultra. I gave him my 'short story' and told im I wanted the procedure done with the Dornier. He agreed that that had advantages. I then asked him what the procedure costs. He said $800 is his fee and that the equipment company would then go after the insurance company for reimbursement and that I would not be asked to pay for the machine rental. He didn't mention anything about a deductible either. I don't know if the same deal applies if the procedure is done with the OssaTron machine. He also told me that the equipment company was doing this in order to get data to submit to the insurance companies so that this will be a covered procedure in the future. My twisted legal mind separates this out into 2 separate contracts. One with the doctor and the other with the equipment company. I understand how this could be an unfair business practice and more likely a violation of the state medical ethics rules. However, to make a rational opinion on this matter I would have to see the state ethical rules. It's sort of a 'tying' arrangement (if you go to this dcotor then you must have the procedure done with a specific machine....a tying of the machine with a doctors service) but in the medical field industry doesn't that always happen? I think it may depend on the status of the OssaTron and whether or not that is covered by insurance or not and if the same deal applies to the OssaTron. Anyway I have a call in to a friend who was a States Attorney for 10 years here in San Diego. I'll see if he knows anything about this. Thanx for all of you information. sorry I couldn't be of more help.

Re: Dr Z - Anti-Kickback Statutes

vince on 2/26/05 at 19:43 (169990)

How about the scheme whereby the dr also the service provider bills for the treatment and the equipment and then cuts a check to the doctor who provided the patient. That sound like it has a little mal odor to me. How about it Dr. Z- do you know any podiatrist who owns a Dornier(s), supplies it to another podiatrist along with a tech,performs the therapy, bills the patients insurance company and then cuts a check to the refering doctor?

Re: Dr Z - Anti-Kickback Statutes

Dr. Z on 2/26/05 at 20:24 (169991)

Its not. It called a global fee. There are mnay ESWT global contracts out there that were setup by Insurance companies. It keeps cost down.

Re: Dr Z - Anti-Kickback Statutes

vince on 2/28/05 at 06:07 (170112)

Call it whatever you want but one company, I think it was in the New York area, was doing it and now they have had to return big $ to at least one insurance company and have gone under. I think the insurance bandits also went after docs who worked with them.

Re: Dr Z - Anti-Kickback Statutes

BLT on 3/02/05 at 16:46 (170318)

ELVIS do you agree with an attorney getting money from another, just for listening to a client for 20 minutes then giving them his friends card that does slip and fall and sending him there? Have you ever been on either end of that type of transaction? If so, can you support the practice and explain why?

Re: Dr Z - Anti-Kickback Statutes

elvis on 3/03/05 at 12:59 (170363)

BLT....No, I've never been in that type of transaction and my firm doesn't enter into those type of transactions either as far as I know. We're patent attorneys....nerds!! LOL Anyway, my understandiing is that in order for there to be a fee splitting arrangement between lawyers it should be based on the amount of work actually done between the lawyers and there must be a disclosure to the client. As background I've been a corporate patent lawyer (employed by corporations) from 1980 till 2001 so I've never paid much attention to these types of ethical issues/conflicts. Right now I am 'of counsel' and don't get involved in the financial end of the law firm business. I've recommended lawyers to friends, acquaintences and business colleaugues many times over the years and have never received a kickback!

Re: Dr Z - Anti-Kickback Statutes

Ralph on 3/03/05 at 16:57 (170378)

Can someone answer something for me? How many major ESWT providers are there? United has been mentioned and Dr. Z apparently has a large group to from what has been posted. I don't know if they compare in membership size meaning the same number of participating doctors or not.

After reading all the various posts it sounds like the doctors who are members of these groups are also investers in the group. Is this correct for both United and Dr. Z's group?

If the doctors are investers in their particular group or I suppose they could be members or investers in both and comes on this site and refers posters here only to other doctors within their own group and they themselves are making a profit from their investment in that group is this called a kick back? Is this what you all are talking about.

Re: Dr Z - Anti-Kickback Statutes

elvis on 3/04/05 at 02:26 (170405)

Ralph.....I'll take a stab at it. In regard to the kickback portion of your email I don't think that's what we're talking about at all. Referrals are OK. I think the problem is when a doctor gets, in effect, a free service or free equipment usage and in doing so bills a patient for his personal service then that 'free use' of the equipment is in effect a kickback because he has gained financially in being able to bill a patient in a situation where BUT FOR the 'free use' the service to the patient never would have happened. When put into the context of other doctors who do not have the luxury of obtaining 'Free Use' of equipment then it puts those doctors (the ones not having free use) at a severe disadvantage in the market place especially in a situation like ESWT where insurance coverage is unlikely (as far as I can tell anyway). If I'm looking for ESWT and I can go to (1) a doctor that charges $800 and no equipment fee or (2) a doctor that charges $3,000 his fee plus the fee for the equipment use guess whihc one I'm going to? The $800 doctor that's who. It becomes a very unfair business practice if you don't have the access to free equipment use. Now on the other side of the equation it's not really 'free use' of the equipment because the company that owns the machine is going to bill my insurance company. If my insurance company pays then they are made whole. If the insurance compnay doesn't pay then the insurance company has agreed not to come after me for the charges they made to the insurance company. As far as I am concerned theequipment use was free. What Dr. Z has said (i think) is that these companies that don't charge the patient are requesting very high reimbursement from the insurance compnaies and will ruin it for everyone whihc will make the insurance companies resist payment for ESWT even more than now. I think that's what's been going on here! LOL

Re: Dr Z - Anti-Kickback Statutes

Ed Davis, DPM on 3/07/05 at 14:10 (170623)

I don't even want 'in' on this discussion but it sure would be great to see if we could get an attorney's opinion on this. Anyone have any connections to make this happen?

Re: Dr Z - Anti-Kickback Statutes

elvis on 3/08/05 at 15:27 (170732)

Ed.......I talked to a lawyer a week ago and his old firm represented a shock wave company (he couldn't remember which one but he thought it was the company that makes the Ossatron). He said that the whole medical field is going to the same business model where the doctors buy in to a company that owns the machine and then they send in patients to get treatment in the machine that they own. This guy said he didn't see it as a kick back either. When I was on a federal govt websiite reading the Anti-Kickback stautes I remember a section to get an advisory opinion. I'll look into that.